Committee approves framework to overhaul contracting after nonprofits warn of millions in unpaid bills

The Los Angeles City Housing and Homelessness Committee on April 10 approved a Chief Legislative Analyst (CLA) framework to reorganize how the city contracts for homelessness services and to address widespread payment delays to providers.

The committee approved the framework (item 2) with an amendment clarifying the MOU language and directed staff to bring formal recommendations back at the next meeting. Committee members voting to approve were Councilmember Raman (yes), Councilmember Blumenfield (aye) and Councilmember McCusker (yes).

Why it matters: nonprofit providers across the county told the committee that delayed contracts and late disbursements have strained operations. "Our total receivables from local government partners equals or exceeds $5 million, of which $1.2 million is owed by the city alone," said a representative of the Downtown Women’s Center, noting that payment lags force use of lines of credit and divert funds from mission work.

CLA and outside consultants presented the findings that drove the vote: as of April 8 the city’s outstanding commitments to LAHSA totaled about $67 million and LAHSA in turn owed providers roughly $47.9 million, a backlog caused by late contract execution, reimbursement timing for Measure A funds and heavy administrative burden across multiple city offices and LAHSA. "We do not have one system that tells us what we owe and what we've paid," consultant Sarah Solon said, calling for centralized accountability and monthly public reporting.

Key actions and recommendations approved or advanced by the committee:
- Direct LHD to fill a Chief Management Analyst position in the Bureau of Homelessness Oversight to centralize coordination of contracts and payments and publish monthly public reports on cash flow and invoice status.
- Instruct the city to negotiate with the county to reduce reimbursement delays (Measure A) and consider changing certain tranches from reimbursement to upfront funding.
- Approve a CLA-led framework to create program-based agreements and annual work orders (function-based contracts that aggregate different funding sources under consistent scopes and KPIs), enabling faster administrative amendments where appropriate.
- Support LAHSA’s contracting of an independent accounting firm (KPMG) to reconcile funds and advise on improved finance practices.

LAHSA and provider perspectives: Janine Trejo, CFO at LAHSA, and Interim LAHSA CEO Guido O’Neill described both the operational pressures and steps they’ve taken to reorganize contracting and to bring in an independent accounting firm to assist with reconciliation. Trejo attributed some payout delays to an influx of invoices after late contract execution and to the time required to reconcile eligibility and expenses. O’Neill said LAHSA has contracted KPMG to begin reconciliation work.

What the committee did not decide: Item 1 (verbal update on contracting) will be re‑agendized with written recommendations for April 15 so the council can take final action. Committee members also left open the governance question of LAHSA’s longer-term structure — including whether the city should create a city-only Continuum of Care — pending further analysis.

Next steps: Staff were directed to return with written recommendations and implementation timelines on April 15. The committee’s near-term fix aims to reduce invoice aging, speed reconciliations, and avoid provider layoffs and service disruptions while a broader governance conversation continues.